CSRD and materiality analysis: employee awareness is the next logical step

In today's business world, sustainability is a key issue that is crucial for companies. Companies must not only make profits, but also consider their social and environmental impact. A crucial step to fulfil this requirement is to conduct a materiality analysis. In this blog post, we will explain what the Corporate Sustainability Reporting Directive (CSRD) is, what a materiality analysis entails, which companies must carry it out and how awareness can be created among employees.

The Corporate Sustainability Reporting Directive, or CSRD for short, is an EU directive that aims to improve and harmonise corporate reporting on sustainability performance. CSRD significantly expands the requirements for sustainability reporting and affects not only listed companies, but also large private companies. This means that a wider range of companies will have to publish more comprehensive reports on environmental, social and governance (ESG) issues.

Materiality analysis, also known as materiality analysis, is a process in which companies identify their most important ESG aspects that have an impact on the company itself and its stakeholders. The aim is to identify those issues that are most material to the company and its stakeholders. This enables the company to focus its resources and efforts on the areas that have the greatest impact.

At present, it is primarily large listed companies or those that receive public funding that are obliged to carry out materiality analyses. However, the requirements will become considerably stricter in the coming years. The EU has adopted the CSRD, which will apply to more than 15,000 companies in Germany from 2025. From the following year, it will apply to companies with at least 250 employees, a balance sheet total of at least 20 million euros or net sales of at least 40 million euros. These changes mean that smaller and medium-sized companies will also have to carry out more materiality analyses in the near future.

The results of a materiality analysis are extremely valuable. They help organisations to clarify their internal and external priorities. This can lead to companies better aligning their resources with sustainable initiatives and taking action to minimise risks and seize opportunities. It can also build credibility and stakeholder trust as companies report more transparently on their ESG efforts.

Regardless of the specific results of the materiality analysis, one thing should always be the goal: to create awareness and understanding of sustainability issues within the company. Sustainability should not be seen as just another regulatory requirement, but as an integral part of the corporate culture. Employees should understand why sustainability is important and how their work can help bring about positive change.

It is crucial to emphasise that optimising the sustainability strategy is an ongoing process. Every employee can contribute to conserving resources and supporting sustainability efforts. What is even more important, however, is that every employee can initiate significant changes in their area of responsibility if they are sufficiently sensitised to the topic. Similar to how we provide training in cyber and IT security to ensure that companies are not hacked and can ensure their business continuity, it is crucial to instil sustainability in the minds of employees. This awareness-raising serves as a source of inspiration, an impetus for change and an impulse that may already set in motion the optimisation of the next sustainability strategy.

If standardised training does not meet the company's requirements, individualised training is a viable option. KFW IPEX-Bank shares this view and, with mybreev, has opted for an e-learning studio that can give digital sustainability awareness the necessary impact within the company.

In order to promote employee awareness, it can be useful to offer customised training courses that are tailored to the company's specific processes and needs. Based on the materiality analysis, companies can recognise in which areas, departments or processes targeted messages in the form of digital awareness courses can have a positive impact on sustainability within the company. This is also the case with cyber and IT security training, which is becoming mandatory in more and more companies; awareness training can empower employees to increase the company's security and recognise potential risks. Sustainability training can also encourage employees to make environmentally and socially responsible decisions or at least consider them when making important decisions. This training can also help to encourage employees to develop innovative solutions to improve the company's sustainability strategy.

Overall, optimising the sustainability strategy is a continuous process. Every employee can make a contribution to this by acting more consciously and sensitising themselves to sustainability. Similar to IT security, companies should get sustainability into the minds of their employees in order to become more sustainable as an organisation and initiate positive changes in their respective areas. CSRD and the materiality analysis are important steps on this journey, but raising awareness is the next logical step in shaping a sustainable future in your organisation.